**Exhibit 10.106**

 

COMMITTED RECEIVABLES PURCHASE AGREEMENT

 

COMMITTEDRECEIVABLES PURCHASE AGREEMENT (as it may be amended, modified or supplementedfrom time to time, the “Agreement”) is made as of August 1, 2005,between UTSTARCOM PERSONAL COMMUNICATIONS LLC, a Delaware limited liabilitycompany (“Seller”) and CITIBANK, N.A., a national banking association (“Buyer”).

 

RECITALS

 

Sellerdesires to sell certain of its Receivables from time to time, and Buyer iswilling to purchase from Seller such Receivables on the terms set forthherein.  Terms not otherwise definedherein shall have the meanings set forth on Exhibit A.

 

Accordingly,the parties hereto agree as follows:

 

1.                                       Saleand Purchase.

 

## (a)                                  Sale.  Seller from time to time during the periodcommencing on the date hereof and terminating on the Purchase Termination Datemay submit to Buyer a request (a “Request”) that Buyer purchase fromSeller the Proposed Receivables described in such  Request. Subject to satisfaction of the conditions precedent set forth in subsection 1(b),Buyer shall purchase, and Seller shall sell, all of Seller’s right, title andinterest (but none of Seller’s obligations) with respect to such ProposedReceivables as of the Purchase Date (all such Proposed Receivables, oncepurchased and sold hereunder, collectively the “Purchased Receivables”).  Under no circumstances shall Buyer purchaseProposed Receivables to the extent that such purchase would result in theOutstanding Purchase Price exceeding the Purchase Commitment.

##  

## (b)                                 ConditionsPrecedent.  Buyer shall not beobligated to purchase Eligible Receivables described in such Request unless onthe Purchase Date therefor:

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### i.                                          Buyer hasreceived a Request in substantially the form of Schedule I attached heretowith respect to the Proposed Receivables, together with such additionalsupporting documentation that Buyer may have reasonably requested;

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### ii.                                       Seller’srepresentations, warranties and covenants herein are true and accurate in allmaterial respects on such Purchase Date, including with respect to the ProposedReceivables;

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### iii.                                    No Event ofRepurchase exists on such Purchase Date, unless Seller has repurchased and paidthe full purchase price for the affected Purchased Receivables pursuant to theterms of Section 5 or such repurchase is being

 

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### effectuated on such Proposed Date by payment in cash or by setoff byBuyer against the Purchase Price for the Proposed Receivables; and

###  

### iv.                                   There shallnot have been any Material Adverse Change in Seller, Parent or, solely withrespect to the purchase of its related Eligible Receivables (and unless waivedin writing by Buyer), any Account Debtor, since the date of the last purchasehereunder.

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## (c)                                  PurchasePrice.  Buyer shall pay thePurchase Price for Purchased Receivables purchased on any Purchase Date,denominated in U.S. dollars, to Seller’s Account in immediately available fundson such Purchase Date.

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## (d)                                 SecurityInterest.  Effective as of thedate hereof, Seller has granted (and Seller hereby does grant) (in addition toand not in substitution of the grant under Section 5(e) below) toBuyer a first priority security interest in and to any and all present andfuture Purchased Receivables and the proceeds thereof to secure the repaymentof all amounts paid to Seller hereunder with accrued interest thereon, and thisAgreement is deemed to be a security agreement. With respect to such grant of a security interest, Buyer may at itsoption exercise from time to time any and all rights and remedies available toit hereunder, under the UCC or otherwise. Seller agrees that five Business Days shall be reasonable prior noticeto Seller of the date of any public or private sale or other disposition of allor any of the Receivables.

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## (e)                                  CommitmentFee.  Seller agrees topay to Buyer quarterly in arrears on or before the 10th day following the endof each of Seller’s fiscal quarter a commitment fee of [CONFIDENTIAL PORTIONOMITTED AND FILED SEPARATELY WITH THE SEC] (the “Commitment Fee”) on theaverage daily difference between the Outstanding Purchase Price and thePurchase Commitment.

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## (f)                                    True Sale;No Recourse. On and at all times following the Trigger Date, except as otherwiseprovided in Section 5, each purchase of the Purchased Receivables is madewithout recourse to Seller and Seller shall have no liability to Buyer for anyAccount Debtor’s failure to pay any Purchased Receivable when it is due andpayable under the terms applicable thereto. Buyer agrees that it shall be responsible for the non-payment of anyPurchased Receivable to the extent it is the result, with respect toReceivables purchased hereunder on and following the Trigger Date, of anInsolvency Event of an Account Debtor, such assumption of credit risk (withrespect to the Outstanding Purchase Price relating thereto only) beingeffective as of the Purchase Date for such Purchased Receivables.  Buyer and Seller have structured thetransactions contemplated by this Agreement as a sale after the occurrence ofthe Trigger Date, and Buyer and Seller each agree to treat each such transactionas a sale for all purposes, including, without limitation, in their respectivebooks, records, computer files, tax returns (federal, state and local),regulatory and governmental filings (and shall reflect such sale in theirrespective financial statements).  Sellerwill advise all persons inquiring about the ownership of the Receivables thatall such Purchased Receivables have been sold to Buyer.  In the event that, contrary to the mutualintent of the parties, any purchase of such Purchased Receivables following theTrigger Date is

 

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## not characterized as a sale, Seller shall, effective as of the TriggerDate, be deemed to have granted to Buyer the security interest granted in Section 1(d) above.

##  

2.                                       SellerRepresentations and Warranties. Seller represents and warrants to Buyer on each Purchase Date that therepresentations and warranties set forth on Exhibit C are true andcorrect.

 

3.                                       SellerCovenants.  Seller agrees to performthe covenants set forth on Exhibit D.

 

4.                                       CollectionActivities.

 

## (a)                                  Buyerappoints Seller as its servicer and agent for the administration and servicingof all Purchased Receivables sold to Buyer hereunder, and Seller hereby acceptssuch appointment and agrees to perform all necessary and appropriate commercialcollection activities with the same care and policies as are applied to its ownReceivables in arranging the timely payment of amounts due and owing by anyAccount Debtor all in accordance with applicable laws, rules andregulations, with reasonable care and diligence, including, without limitation,diligently and faithfully performing all servicing and collection actions(including, if necessary, acting as party of record in foreign jurisdictions); *provided, however*, that such appointmentshall not release Seller from any of its duties, responsibilities, liabilitiesand obligations resulting from or arising hereunder.  Buyer may replace Seller as its servicerpursuant to clause (f) below.  Inconnection with its servicing obligations, Seller will perform its obligationsand exercise its rights under contracts related to the Purchased Receivableswith the same care and applying the same policies as it would exercise andapply if it owned the Purchased Receivables and shall act in the best interestof Buyer to maximize Collections and *provided,further* that following an Insolvency Event of an Account Debtor ofReceivables purchased hereunder on or after the Trigger Date (or any otherevent that Buyer may assume the risk thereof in writing from time to time afterthe date hereof), Buyer shall be fully responsible for all costs and expensesincurred by Seller in connection herewith, which costs and expenses shall notbe adjusted or setoff against Collections in any manner.

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## (b)                                 Seller will,on or prior to the initial Purchase Date, establish in its own name, theCollection Account.  Seller covenants andagrees (i) to send a notice to each Account Debtor substantially in theform attached hereto as Exhibit E instructing each Account Debtor to payall amounts owing under the Receivables to the Collection Account, (ii) notto change such payment instructions while any Purchased Receivables remainoutstanding, and (iii) to take any and all other reasonable actions,including actions requested by Buyer, to ensure that all amounts owing underthe Receivables will be deposited exclusively to the Collection Account.

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## (c)                                  If Sellerreceives a misdirected payment of a Receivable from any Account Debtor, Sellerwill immediately notify Buyer and immediately (and in any event within twoBusiness Days of receipt thereof) remit the funds to the Collection Account.

 

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## Until remitted, Seller will hold such funds in trust as Buyer’sexclusive property and safeguard such funds for the benefit of Buyer.

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## (d)                                 Seller, asservicer, shall be responsible for identifying, matching and reconciling anypayments received in the Collection Account with the Receivable associated withsuch payment. If any payment is received in the Collection Account other thanpayments on the Receivables, such funds will immediately be forwarded toSeller, subject to receipt of evidence of payments details documenting that thepayment is for transactions other than the Receivables and that no event under Section 5exists. If any payment is received from an Account Debtor, and such payment isnot identified or misidentified by such Account Debtor as relating to aparticular Receivable and cannot otherwise be reasonably identified (e.g. byinvoice amount) as relating to a particular Receivable or if Buyer determinesthat the reconciliation is otherwise defective within five Business Days ofreceipt thereof or Seller defaults in its obligations as servicer as set forthunder this Section 4, such payment shall be applied first to the unpaidPurchased Receivables of such Account Debtor in chronological order (beginningwith the oldest unpaid Purchased Receivable), and then to Receivables whichhave not been purchased hereunder, also in chronological order.

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## (e)                                  Based on thereconciliation information  provided toBuyer by Seller as servicer prior to 11am Pacific time under clause (d) aboveand other information available to Buyer, (1) Buyer will remit to Seller’sAccount the same day, if the reconciliation is in order, (i) Collectionson account of Receivables not purchased hereunder and (ii) all othercollections received in the Collection Account and not relating to theReceivables, and (2) Buyer will retain for its own account from Collectionson account of Purchased Receivables an amount up to the Discount of suchPurchased Receivables and any amounts then owing to Buyer.

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## (f)                                    If Sellerdefaults in its obligations as servicer as set forth under this Section 4,Buyer may at any time thereafter (and shall, without requirement of notice toSeller or any other Person, upon a Material Adverse Change or an InsolvencyEvent of Seller or Parent) replace Seller as servicer (which replacement may beeffectuated through the outplacement to a Person of all back office duties,including billing, collection and processing responsibilities, and access toall personnel, hardware and software utilized in connection with suchresponsibilities).

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5.                                       RepurchaseEvents; Indemnities and Set-Off.

 

## (a)                                  If any ofthe following events (“Events of Repurchase”) occurs and is continuing:

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### i.                                          anyrepresentation or warranty by Seller hereunder with respect to any of thePurchased Receivables is incorrect when made or deemed made and shall have anadverse effect on the ability to collect the Net Invoice Amount of suchPurchased Receivables; or

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### ii.                                       If,

 

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#### (1)                                  Seller failsto perform or observe any other term, covenant or agreement with respect to anyof the Purchased Receivables and such failure shall have an adverse effect onthe collectibility of the Net Invoice Amount of any Purchased Receivable;

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#### (2)                                  Sellerinstructs an Account Debtor to pay to an account other than the CollectionAccount or if an Account Debtor makes repeated misdirected payments to Seller;

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#### (3)                                  An AccountDebtor asserts a Dispute with respect to any Purchased Receivable, or

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#### (4)                                  Buyer doesnot receive all amounts owing with respect to a Purchased Receivable within 45days of the Due Date thereof for any other reason, unless such non-payment withrespect to Receivables purchased hereunder following the Trigger Date is theresult of an Insolvency Event of an Account Debtor,

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then,Seller shall, at the time, in the manner and otherwise as hereinafter setforth, repurchase and pay for the affected part (or, if such misrepresentation,Dispute or failure to perform relates to more than 20% of such affectedPurchased Receivables then outstanding, then, at Buyer’s discretion, all) ofsuch Purchased Receivables then outstanding affected by such Event ofRepurchase at Buyer’s option and demand. The repurchase price for a Purchased Receivable shall be the amountequal to the Outstanding Purchase Amount relating thereto and shall be paid tothe Collection Account in immediately available funds.  Any repurchase of a Purchased Receivablehereunder shall be without recourse to or warranty by Buyer.  Seller agrees that Buyer may set off againstany unpaid obligation of Seller under this Section, as provided in subsection (d) below.  Amounts due hereunder shall accrue interestat the Refundable Discount Margin.

 

## (b)                                 Sellerhereby agrees to indemnify Buyer (together with its officers, directors,agents, representatives, shareholders, counsel, employees and lenders, each, an“Indemnified Party”) from and against any and all claims, losses andliabilities (including, without limitation, reasonable attorneys’ fees) (all ofthe foregoing being collectively referred to as “Indemnified Amounts”)arising out of or resulting from any of the following: (i) the sale toBuyer of any Receivable which purports to be a Purchased Receivable as to whichthe representations and warranties made herein are not true and correct on thePurchase Date therefor; (ii) any other representation or warranty made ordeemed made by Seller (or any of its officers) under or in connection with thisAgreement which shall have been incorrect in any material respect when made; (iii) thefailure by Seller or any Purchased Receivable to comply with any applicablelaw, rule or regulation; (iv) the failure to vest in Buyer aperfected security interest in each Purchased Receivable and the proceeds andCollections in respect thereof, free and clear of any liens or encumbrances ofany kind or nature whatsoever; (v) any Dispute or any other claimresulting from the services or merchandise related to such Purchased Receivableor the furnishing or failure to furnish such services or merchandise or

 

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## relating to collection activities with respect to such PurchasedReceivable; provided, however, this clause (v) shall not be deemed toinclude any failure to pay arising out of any Insolvency Event of an AccountDebtor, or (vi) the commingling by Seller of Collections at any time withother funds of Seller or any other Person; *provided,however*, with respect to Receivables purchased hereunder on andfollowing the Trigger Date that in all events there shall be excluded from theforegoing indemnification any claims, losses or liabilities resulting solelyfrom the gross negligence or willful misconduct of an Indemnified Party or asthe result of an Insolvency Event of an Account Debtor.  Amounts due hereunder shall accrue interestat the Refundable Discount Margin.

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## (c)                                  Tax Indemnification.  Seller shall pay, and indemnify and holdBuyer harmless from and against, any taxes that may at any time be asserted inrespect of the purchase transactions hereunder (including any sales,occupational, excise, personal property, privilege or license taxes, or anywithholdings, but not including taxes imposed upon Buyer with respect to itsoverall net income) and costs, expenses and reasonable counsel fees indefending against the same, whether arising by reason of the acts to beperformed by Seller hereunder or otherwise.

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## (d)                                 Set-Off.  Seller further agrees that, if Seller failsto pay any amounts due under this Section 5 within three (3) BusinessDays after receipt of notice from Buyer of the occurrence of an Event ofRepurchase, Seller hereby irrevocably instructs Buyer to set-off such amountagainst the Purchase Price of any Proposed Receivables to be purchased on orafter such date or against any Collections. Buyer may also set-off for unpaid amounts under this Section 5against any other funds of Seller held by Buyer.  No act or consent of any nature whatsoever isrequired prior to the right of Buyer to exercise such right of set-off.

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## (e)                                  CollateralSecurity.  As collateralsecurity for Seller’s existing and future obligations to repurchase and pay forPurchased Receivables as set forth in clause (a) above and indemnificationobligations set forth in clauses (b) and (c) above, Seller herebygrants to Buyer a first priority lien on and security interest in, and theright of set-off against (1) the Collection Account and (2) allproceeds of the foregoing.

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## (f)                                    UCC.  The rights granted to Buyer hereunder are inaddition to all other rights and remedies afforded to Buyer as a secured partyunder the UCC.

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6.                                       Notices.  Unless otherwise provided herein, allcommunications by Seller or Buyer or any other agreement entered into inconnection herewith shall be in writing and (except for financial statementsand other informational documents which may be sent by first-class mail,postage prepaid, or by email) shall be personally delivered or sent by arecognized overnight delivery service, certified mail, postage prepaid, returnreceipt requested, or by telecopier (with confirmed receipt) to Seller orBuyer, as the case may be, at its address set forth below:

 
| If  to Seller: |   | UTStarcom, Inc.     |
|----------------|--------|--------------------------|
|           |   | 1275  Harbor Bay Parkway |

 

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|          |   | Alameda,  CA 94502                      |
|---------------|--------|-----------------------------------------|
|          |   | Fax:  (510) 864-8802                    |
|          |   | email:  ksanfelipe@utstar.com           |
|          |   | cc  email: candace.hsu@utstar.com       |
|          |   | Attention:  Keith San Felipe, Treasurer |
|          |   |                                    |
| If  to Buyer: |   | Citibank,  N.A.                         |
|          |   | 388  Greenwich Street, 25th Floor       |
|          |   | New  York, NY 10013                     |
|          |   | Fax:  (212) 816-6290                    |
|          |   | email:  Erik.Wanberg@citigroup.com      |
|          |   | Attention:  Erik Wanberg                |

 

AnyRequest, and any supporting documentation in connection herewith or therewith,such as copies of invoices, may be sent by Seller by fax or as a PDF fileattachment to an email, and Buyer and Seller may otherwise communicate by emailor fax.  Seller agrees that Buyer may presumethe authenticity, genuineness, accuracy, completeness and due execution of anyemail or fax communication bearing a facsimile or scanned signature resemblinga signature of an authorized Person of Seller without further verification orinquiry by Buyer.  Notwithstanding theforegoing, Buyer in its sole discretion may elect not to act or rely upon sucha communication and shall be entitled (but not obligated) to make inquiries orrequire further Seller action to authenticate any such communication.

 

APerson may change the address at which it is to receive notices hereunder bywritten notice in the foregoing manner given to the other.

 

7.                                       Survival.  All covenants, representations and warrantiesmade herein shall continue in full force and effect so long as any PurchasedReceivables remain outstanding.  Seller’sobligations to indemnify Buyer with respect to the expenses, damages, losses,costs and liabilities shall survive until all applicable statute of limitationsperiods with respect to actions that may be brought against Buyer have run.

 

8.                                       Expenses.  Seller shall reimburse Buyer for allreasonable costs (including reasonable attorneys’ fees and expenses) Buyerincurs in connection with the preparation and negotiation of this Agreement inexcess of $10,000 and for the enforcement of its rights or indemnitieshereunder.

 

9.                                       GeneralProvisions.

 

ThisAgreement shall be governed by the laws of the State of New York, withoutgiving effect to conflicts of law principles. Each of the parties hereto irrevocably and unconditionally submits, foritself and its property, to the nonexclusive jurisdiction of any New York Statecourt or federal court of the United States sitting in the Borough ofManhattan, New York City, and any appellate court from any thereof, in anyaction or proceeding arising out of or relating to this Agreement, or forrecognition or enforcement

 

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ofany judgment, and each of the parties hereto hereby irrevocably andunconditionally agrees that all claims in respect of any such action orproceeding may be heard and determined in any such New York State court or, tothe extent permitted by law, in such federal court.  A final judgment in any such action orproceeding shall be conclusive and may be enforced in other jurisdictions by suiton the judgment or in any other manner provided by law.  Each of the parties hereto irrevocably andunconditionally waives, to the fullest extent it may legally and effectively doso, any objection that it may now or hereafter have to the laying of venue ofany suit, action or proceeding arising out of or relating to this Agreement inany New York State or federal court located in the Borough of Manhattan.  Each of the parties hereto hereby irrevocablywaives, to the fullest extent permitted by law, the defense of inconvenientforum to the maintenance of such action or proceeding in any such court.

 

ThisAgreement represents the final agreement of the parties with respect to thesubject matter hereof and supersedes all prior and contemporaneous understandingsand agreements with respect to such subject matter.  No provision of this Agreement may be amendedor waived except by a writing signed by the parties hereto.  This Agreement shall bind and inure to thebenefit of the respective successors and permitted assigns of each of theparties; provided, however, that Seller may not assign any of itsrights hereunder without Buyer’s prior written consent, given in its solediscretion.

 

Buyershall have the right to sell, transfer, assign, negotiate, or grant participationsin all or any part of, or any interest in, Buyer’s rights, obligations andbenefits hereunder; provided, that, at all times prior to an Event ofTermination, Buyer shall provide Seller at least 30 days’ notice prior to anysale, transfer or assignment of Buyer’s obligations under this Agreement,such  sale, transfer or assignment shallbe only to an Eligible Assignee and shall be subject to the prior consent ofSeller, such consent to be provided in a timely fashion and not unreasonablywithheld; and provided, further, that an assignment by Buyer to anAffiliate of Buyer shall not be subject to such prior notice and consentprovisions.  Subject to the notice andconsent provisions set forth above, from and after the effective date of anysale, transfer or assignment , the assignee thereunder shall be a party to thisAgreement and, to the extent of the interest assigned thereunder, shall havethe rights, duties and obligations of a Buyer under this Agreement, thePerformance Undertaking and related documents, and the assigning Buyerthereunder, to the extent of the interest so assigned, shall be released fromits obligations under this Agreement and the other documents relating hereto.

 

Eachprovision of this Agreement shall be severable from every other provisionhereof for the purpose of determining the legal enforceability of any specificprovision.  This Agreement may beexecuted in any number of counterparts and by different parties on separatecounterparts, each of which, when executed and delivered, shall be deemed to bean original, and all of which, when taken together, shall constitute but oneand the same agreement.

 

BUYERAND SELLER IRREVOCABLY WAIVE ANY RIGHT THAT EITHER MAY HAVE TO A JURYTRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR

 

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ARISINGOUT OF ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS,TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW OR STATUTORYCLAIMS.

 

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INWITNESS WHEREOF, the parties hereto have caused this Agreement to be executedas of the date first above written.

 
|   | UTSTARCOM  PERSONAL COMMUNICATIONS  LLC, Seller |
|--------|-------------------------------------------------|
|   |                                            |   |
|   |                                            |   |
|   | By:                                             |   | /s/ Keith San Felipe |   |
|   | Title:                                          |   | Treasurer |   |
|   |                                            |   |
|   | CITIBANK, N.A.,  Buyer                          |
|   |                                            |
|   |                                            |
|   | By:                                             |   | /s/ Keith R.  Karako |   |
|   | Title:                                          |   | Vice President |   |
|        |                                                 |  |  |  |  |  |  |

 

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SCHEDULE I

 

**Form of Request**

 

[date]

 

Citibank,N.A.388 Greenwich Street, 25th FloorNew York, NY 10013

 

Referenceis hereby made to that certain Purchase Agreement, dated as of August 1,2005, between UTSTARCOM PERSONAL COMMUNICATIONS LLC (“Seller”) andCITIBANK, N.A. (“Buyer”) (as it may be amended, modified or supplementedfrom time to time, the “Agreement”; terms not otherwise defined hereinshall have the meanings set forth in the Agreement).

 

Pursuantto the terms of the Agreement, Seller hereby requests that Buyer purchase fromSeller the Proposed Receivables listed on the Exhibit attached hereto withan aggregate Purchase Price of $                .

 

Sellerrepresents and warrants that as of the date hereof, assuming the purchase ofthe Proposed Receivables pursuant to terms of the Agreement:

 

1.                                       Followingthe purchase of the Proposed Receivables set forth in this Request, theOutstanding Purchase Price does not exceed $100,000,000;

 

2.                                       Seller’srepresentations, warranties and covenants set forth in the Agreement are trueand accurate in all material respects;

 

3.                                       No Event ofRepurchase exists on such Purchase Date except for repurchases beingeffectuated on the date hereof by setoff by Buyer against the Purchase Pricefor the Proposed Receivables; and

 

4.                                       There hasnot been any Material Adverse Change in Seller or Account Debtor since the dateof the last purchase under the Agreement.

 

5.                                       There hasnot been any Dispute with any Account Debtor of any Proposed Receivable orPurchased Receivable since the date of the last purchase under the Agreementthat has not been disclosed to Buyer (and for which Buyer may establish areserve, at its discretion, in an amount not exceeding the amount asserted inconnection with such Dispute).

 

Uponacceptance by Buyer of this Request and payment of the Purchase Price, Buyerhereby purchases, and Seller hereby sells, all of Seller’s right, title andinterest (but none of Seller’s obligations) with respect to the ProposedReceivables on the attached Exhibit as of the date hereof, and theProposed Receivables shall become Purchased Receivables in the manner set forthin the Agreement.

 

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|               | UTSTARCOM  PERSONAL COMMUNICATIONS LLC |
|--------------------|----------------------------------------|
|               |                                   |
|               |                                   |
|               | By:                                    |   |   |
|               |                                   | Title: |   |   |
|               |
| REQUEST  ACCEPTED: |
| CITIBANK,  N.A.    |
|               |
|               |
| By:                |                                   |   |
| Title:             |                                   |   |
|                    |                                        |  |  |  |  |  |  |  |  |

 

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EXHIBIT TO REQUEST

 

List of Accounts ReceivableProposed for Sale as of                ,200  

 
| **Customer** | ** ** | **Invoice/Purchase  Order Number** | ** ** | **Invoice Amount** | ** ** | **Shipment Date** | ** ** | **Customer P.O. #** | ** ** | **Due Date** | ** ** |
|--------------|------------|------------------------------------|------------|--------------------|------------|-------------------|------------|--------------------------|------------|--------------|------------|
|         |       |                               |       |               |       |              |       |                     |       |         |       |
|         |       |                               |       |               |       |              |       |                     |       |         |       |
|         |       |                               |       |               |       |              |       |                     |       |         |       |

 

**CALCULATION OF PURCHASE PRICE FOR THE PROPOSED RECEIVABLES**

 
| Net Invoice Amount:                                                |       | $          |       |
|--------------------------------------------------------------------|------------|------------|------------|
| *multiplied by**Adjustment Percentage*                             |       | 95         | %          |
|                                                               |       |       |       |
| Adjusted Invoice Amount                                            |       | $          |       |
| Less: Discount                                                     |       | $          |       |
|                                                               |       |       |       |
| **Purchase Price**                                                 | ** ** | **$**      | ** ** |
| ** **                                                         | ** ** | ** ** | ** ** |
| **CALCULATION OF MAXIMUM AMOUNT**                                  |       |       |       |
| Outstanding Purchase Price (without Proposed Receivables):         |       | $          |       |
| Purchase Price for Proposed Receivables:                           |       | $          |       |
| **Total Outstanding Purchase Price**(not  to exceed $100,000,000): |       | $          |       |

 

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Schedule II

Account Debtors

 

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Exhibit A

Certain Defined Terms

 

Asused herein, the following terms shall have the following meanings:

 

“AccountDebtor”:  The account debtors listedon Schedule II hereto, as such Schedule may be modified orsupplemented from time to time, as approved by Buyer in writing in its sole andabsolute discretion in good faith, exercised in a commercially reasonablemanner and based solely on the creditworthiness of the subject Account Debtor;in furtherance of the foregoing, Buyer shall exclude from Schedule II withrespect to future purchases an account debtor who is subject to an InsolvencyEvent, and may elect to exclude any account debtor from Schedule II withrespect to future purchases, the Purchased Receivables of whom (i) havebeen subject to material repurchases under Section 5 of this Agreement, (ii) havebeen subject to material and ongoing Disputes, or (iii) are 45 days ormore past due.  Buyer may also from timeto time specify maximum Outstanding Purchase Price limits for certain AccountDebtors in good faith, exercised in a commercially reasonable manner and basedsolely on the creditworthiness of the subject Account Debtor.

 

“AdjustedInvoice Amount”:  For PurchasedReceivables on any Purchase Date, the aggregate Net Invoice Amount of suchPurchased Receivables multiplied by the Adjustment Percentage as of such date.

 

“AdjustmentPercentage”:  The AdjustmentPercentage with respect to the amount paid by Buyer for the PurchasedReceivables on a Purchase Date shall be the percentage mutually agreed upon byBuyer and Seller with respect to such Purchase Date, which as of the datehereof shall be 95%.

 

“Affiliate”:  As to any Person, any other Person that,directly or indirectly, is in control of, is controlled by or is under commoncontrol with such Person or is a director or officer of such Person.  For the purposes of this definition, “control”,when used with respect to any specified Person, means the power to direct themanagement and policies of such Person, directly or indirectly, whether throughthe ownership of voting securities, by contract or otherwise.

 

“Agreement”:  This Purchase Agreement, as it may beamended, modified or supplemented from time to time in accordance with theterms hereof.

 

“BusinessDay”:  Any day that is not aSaturday, Sunday or other day on which banks in New York City are required orpermitted to close.

 

“Buyer”:  The meaning set forth in the preamble.

 

“Changeof Control”:  With respect to anyPerson, means any of the following: following:  (a) the sale, leaseor transfer of all or substantially all of the assets of such Person or group(as such term is defined in Section 13(d)(3) of the SecuritiesExchange Act of 1934, as amended); (b) the liquidation or dissolution of(or the adoption of a plan of liquidation by) such Person; or (c) theacquisition by any Person or group (as such

 

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termis defined in Section 13(d)(3) of the Securities Exchange Act of1934, as amended) of more than 20% of the voting stock of such Person by way ofmerger or consolidation or otherwise.

 

“CollectionAccount”:  Account #[                     ]at Citibank, N.A., New York, New York, ABA #[                     ].

 

“CollectionDate”:  With respect to any PurchasedReceivables, the date of receipt into the Collection Account of Collectionsrelating to such Purchased Receivables. In the event that Collections relating to any Purchased Receivable aredeposited into the Collection Account on more than one day, “Collection Date”shall be the date as of which all outstanding amounts relating to suchPurchased Receivables have been deposited in or transferred to the CollectionAccount.

 

“Collections”:  With respect to any Receivable, all cashcollections, checks (or availability of good funds), wire transfers, electronicfunds transfers and other cash proceeds of such Receivable, deposited in ortransferred, or to be deposited or transferred, to the Collection Account,including, without limitation, all cash proceeds thereof.

 

“CommitmentFee”:  The meaning set forth in Section 1(e).

 

“ControlAgreement”:  The Deposit AccountControl Agreement, dated the date hereof, among Buyer, Seller, and Citibank,N.A. in its capacity as depository institution, as such agreement may beamended, modified or supplemented from time to time by agreement of suchparties.

 

“Discount”:  For any Purchase Receivable, an amount equalto:

 

DM  x                (AIA xTenor/360)

 

inwhich

 

DM                           =                                         DiscountMargin

AIA                        =                                         AdjustedInvoice Amount of such Purchased Receivable

Tenor                =                                         number ofdays from the Purchase Date of such Purchased Receivable to 45 days past theDue Date of such Purchased Receivable

 

“DiscountMargin”:  The discount cost appliedby Buyer to Purchased Receivables purchased on a Purchase Date, equal to (a) forany approved Account Debtor set forth in Schedule II herein as of the datehereof, (i) [CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THESEC] if the payment cycle is less than 75 days or (ii) [CONFIDENTIALPORTION OMITTED AND FILED SEPARATELY WITH THE SEC] if the payment cycle is 75days or more, calculated on the basis of the Adjusted Invoice Amount of such Purchased Receivables for the numberof days between the date of discounting and 45 days past the Due Date and (b) forany other Account Debtor, as mutually agreed by Buyer and Seller.

 

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“Dispute”:  Any dispute, discount, deduction, claim,offset, defense or counterclaim of any kind relating to the PurchasedReceivables (other than a discount or adjustment granted with Buyer’s writtenapproval), regardless of whether the same (i) is in an amount greaterthan, equal to or less than the Purchased Receivables concerned, (ii) isbona fide or not, or (iii) arises by reason of an act of God, civil strife,war, currency restrictions, foreign political restrictions or regulations orany other circumstance beyond the control of Seller or related AccountDebtor.  In the absence of an InsolvencyEvent of an Account Debtor of Receivables purchased hereunder on and followingthe Trigger Date, any Purchased Receivables 45 days past due or more are deemedto have a Dispute and be subject to Section 5 herein; *provided that* the failure to make paymentof a Purchased Receivable as a result of an Insolvency Event of an AccountDebtor of Receivables purchased hereunder on and following the Trigger Dateshall not be deemed a “Dispute” hereunder.

 

“DueDate”:  With respect to any PurchasedReceivable, the last day that is set forth for timely payment in the invoiceprovided to the related Account Debtor.

 

“EligibleAssignee”:  A nationally recognizedbank or financial institution that is experienced in receivables purchasetransactions and possesses the financial ability to perform as a Buyer underthis Agreement;

 

“EligibleReceivables”:  Receivables generatedby Seller in the ordinary course of its business from the sale oftelecommunication equipment to an Account Debtor.

 

“EmployeeBenefit Plan”:  any employee benefitplan within the meaning of §3(3) of ERISA maintained by Seller or anyERISA Affiliate, or with respect to which any of them have any liability.

 

“ERISA”:  the Employee Retirement Income Security Actof 194, as amended.

 

“ERISAAffiliate”:  any entity which isunder common control with Seller within the meaning of ERISA or which istreated as a single employer with Seller under the Internal Revenue Code of1986, as amended.

 

“Eventsof Repurchase”:  The meaning setforth in Section 5(a).

 

“Eventsof Termination”:  The meaning setforth in Exhibit F.

 

“GAAP”: generally accepted accounting principlesin the United States of America, applied on a consistent basis as set forth inOpinions of the Accounting Principles Board of the American Institute ofCertified Public Accountants and/or in statements of the Financial AccountingStandards Board and/or the rules and regulations of the SEC and/or theirrespective successors and which are applied in the circumstances as of the datein question.

 

“IndemnifiedAmounts”:  The meaning set forth in Section 5(b).

 

“IndemnifiedParty”:  The meaning set forth in Section 5(b).

 

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“InsolvencyEvent”:  With respect to any Person,such Person shall generally not pay its debts as such debts become due, orshall admit in writing its inability to pay its debts generally, or shall makea general assignment for the benefit of creditors; or any proceeding shall beinstituted by or against such Person seeking to adjudicate it a bankrupt orinsolvent, or seeking liquidation, winding up, reorganization, arrangement,adjustment, protection, relief, or composition of it or its debts under any lawrelating to bankruptcy, insolvency or reorganization or relief of debtors, orseeking the entry of an order for relief or the appointment of a receiver,trustee, custodian or other similar official for it or for any substantial partof its property and, in the case of any such proceeding instituted against it(but not instituted by it), either such proceeding shall remain undismissed orunstayed for a period of 30 days, or any of the actions sought in suchproceeding (including, without limitation, the entry of an order for reliefagainst, or the appointment of a receiver, trustee, custodian or other similarofficial for, it or for any substantial part of its property) shall occur; orsuch Person shall take any action to authorize any of the actions set forthabove in this definition; *provided, that*in the case of the inability of any Person to pay its debts as such debtsbecome due arising by reason of currency restrictions or foreign politicalrestrictions or regulations beyond the control of Seller or such Person, suchevent shall not be deemed an “Insolvency Event” hereunder.

 

“LIBOR”:  For any period, the LIBOR base rate quoted byCitibank N.A. and then in effect for such period; *provided* that for any period between 1 and 30 days LIBORshall be based on a one-month period, for any period between 31 and 60 daysLIBOR shall be based on a two-month period and for any period between 61 and 90days LIBOR shall be based on a three-month period.

 

“MaterialAdverse Change”:  (x) As to Seller orParent, an event that results or could likely result in (a) a materialadverse change in (i) the business, condition (financial or otherwise),operations, relationships with any Account Debtor, performance, properties orprospects of Seller or Parent, (ii) the ability of Seller, as servicer orotherwise, to fulfill its obligations hereunder, or of Parent to fulfill itsobligations under the Performance Undertaking, (b) the impairment of thevalidity or enforceability of, or the rights, remedies or benefits availableto, Buyer under this Agreement or the Performance Undertaking, and (y) as toany Account Debtor, (i) a Change of Control of such Account Debtor, or (ii) asignificant downgrade (meaning, (x) a full level downgrade of an “investmentgrade” account debtor from the level existing on the initial purchase ofReceivables relating to such Account Debtor, (y) a downgrade of an “investmentgrade” account debtor below investment grade or (z) any downgrade of a non-”investmentgrade” account debtor) of the senior unsecured indebtedness of such AccountDebtor by a nationally recognized rating agency.

 

“NetInvoice Amount”:  The amount of theapplicable Purchased Receivable shown on the invoice for such PurchasedReceivable as the total amount payable by the related Account Debtor (net ofany discounts, credits or other allowances shown on such invoice).

 

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“OutstandingPurchase Amount”:  (x) The aggregateamount of all Purchase Prices paid by Buyer with respect to the PurchasedReceivables, plus the Discount Margin, minus (y) the aggregate amount of allcollections with respect to the Purchased Receivables deposited into the CollectionAccount.

 

“OutstandingPurchase Price”:  (x) The aggregateamount of all Purchase Prices paid by Buyer with respect to the PurchasedReceivables, *minus* (y) theaggregate amount of all collections with respect to the Purchased Receivablesdeposited into the Collection Account.

 

“Parent”:  UTStarcom, Inc., a Delaware corporation.

 

“PBGC”:  the Pension Benefit Guaranty Corporation orany entity succeeding to all or any of its functions under ERISA.

 

“PerformanceUndertaking”:  The undertaking being executedand delivered by Parent to Buyer as of the date of this Agreement.

 

“Person”:  An individual, partnership, corporation(including a business trust), limited liability company, joint stock company,trust, unincorporated association, joint venture or other entity, or agovernment or any political subdivision or agency thereof.

 

“ProposedReceivables”:  With respect to anyPurchase Date, the Eligible Receivables proposed by Seller to Buyer anddescribed in a Request to be purchased on such Purchase Date.

 

“PurchaseCommitment”:  $100,000,000.

 

“PurchaseDate”:  Each date on which Buyerpurchases Eligible Receivables.

 

“PurchasePrice”:  With respect to anyPurchased Receivables, equals (i) Adjusted Invoice Amount *minus* (ii) the Discount.

 

“PurchaseTermination Date”:  The earlier of(x) a date 364 days from the date of this Agreement, which shall be July 27,2006; *provided*, *that* such date shall be automaticallyextended for annual successive terms unless Seller or Buyer provides writtennotice to the other Person not less than 30 days prior to the expiration ofsuch annual term, that such Person does not intend to extend the term of thisAgreement, and (y) the occurrence of an Event of Termination; *provided, further*, that Seller mayterminate this facility early upon written notice thereof to Buyer.

 

“PurchasedReceivables”:  The meaning set forthin Section 1(a).

 

“Receivables”:  All accounts, instruments, documents,contract rights, general intangibles and chattel paper (as such terms areunderstood under the UCC), all tax refunds and proceeds of insurance, and allother forms of obligations owing to Seller by an Account Debtor, whether nowexisting or hereafter created that represent bona fide obligations of anAccount Debtor arising out of Seller’s sale and delivery of goods and

 

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services,together with the Related Security with respect thereto, and with respect toeach of the foregoing, all proceeds thereof.

 

“ReconciliationReport”:  With respect to anyPurchased Receivables, a report detailing the reconciliation of the paymentscollected for such Purchased Receivables.

 

“RefundableDiscount Margin”:  With respect toany Purchased Receivables, the portion of the Discount Margin applied by Buyerfrom the Collection Date to 45 days past the Due Date.

 

“RelatedSecurity:  With respect to anyReceivable:

 

(i)                                     all ofSeller’s interest in any merchandise (including returned merchandise) relatingto any sale giving rise to such Receivable;

 

(ii)                                  all securityinterests or liens and property subject thereto from time to time purporting tosecure payment of such Receivable, whether pursuant to a contract related tosuch Receivable or otherwise, together with all financing statements signed bythe related Account Debtor describing any collateral securing such Receivable;

 

(iii)                               allguaranties, insurance and other agreements or arrangements of whatevercharacter from time to time supporting or securing payment of such Receivablewhether pursuant to the contract related to such Receivable or otherwise; and

 

(iv)                              all books,records and other information (including, without limitation. computerprograms. tapes, discs, punch cards and data processing software) relating tosuch Receivable and the related Account Debtor.

 

“Request”:  The meaning set forth in Section 1(a).

 

“SEC”:  The Securities and Exchange Commission.

 

“Seller”:  The meaning set forth in the preamble.

 

“Seller’sAccount”:  Seller’s account at[bank/address], ABA# [                     ],Account # [                   ],or such other bank account identified in writing by Seller to Buyer from timeto time.

 

“TriggerDate”:  The date on which theconditions precedent set forth in Exhibit B (3) are satisfied.

 

“UCC”:  The Uniform Commercial Code in effect in theState of Delaware from time to time.

 

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Exhibit B

Conditions Precedent

 

1.                                       ConditionsPrecedent for Facility Closing

 

Thepurchase of Proposed Receivables under this Agreement is subject to the conditionsprecedent that Buyer shall have received on or before such date the following,each (unless otherwise indicated) dated such date, in form and substancesatisfactory to Buyer:

 

(a)                                  A dulyexecuted Agreement.

 

(b)                                 A dulyexecuted Performance Undertaking.

 

(c)                                  Proof ofpayment of the setup fee to Buyer.

 

2.                                       ConditionsPrecedent for Initial Purchase Date

 

Thepurchase of Proposed Receivables under the Agreement on the initial PurchaseDate is subject to the conditions precedent that Buyer shall have received onor before such date the following, each (unless otherwise indicated) dated suchdate, in form and substance satisfactory to Buyer:

 

(a)                                  Acertificate issued by the Secretary of State of the State of Delaware as to thelegal existence and good standing of Seller and Parent.

 

(b)                                 Certifiedcopies of Seller’s and Parent’s articles of organization and limited liabilitycompany agreement and certified copies of all documents evidencing necessarycompany action and governmental approvals, if any, with respect to theAgreement.

 

(c)                                  Acertificate of the Secretary or Assistant Secretary of Seller and Parentcertifying the names and true signatures of the incumbent officers of suchentity authorized to sign the Agreement, each Request, the PerformanceUndertaking and any other documents to be delivered by it hereunder.

 

(d)                                 Acknowledgmentor time-stamped receipt copies of proper financing statements (showing Selleras debtor and Buyer as secured party with respect to the grant by Seller of afirst priority security interest to Buyer as contemplated by Section 5(e) ofthe Agreement) duly filed on or before the initial Purchase Date under the UCC.

 

(e)                                  Completedrequests for information (UCC search results) dated within 20 days of theinitial Purchase Date, and a schedule thereof listing all effectivefinancing statements filed in the State of Delaware that name Seller as debtor,together with copies of all other financing statements filed against Seller andreleases of, and acknowledgment copies of proper termination statements (Form UCC-3)necessary to

 

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evidence the release of all security interests,ownership and other rights of any Person previously granted by Seller in theReceivables.

 

(f)                                    (i) Favorableopinion of counsel to Seller in form and substance satisfactory to Buyer and (ii) favorableopinion of in-house counsel of Seller in form and substance satisfactory toBuyer.

 

(g)                                 Proof ofpayment of all reasonable attorneys’ fees and disbursements incurred by Buyerin excess of $10,000.

 

(h)                                 Evidence ofestablishment of the Collection Account.

 

(i)                                     A dulyexecuted Control Agreement.

 

(j)                                     A copy ofthe duly executed notice from Seller substantially in the form attached heretoas Exhibit E instructing each Account Debtor to deposit all payments withrespect to the Receivables solely into the Collection Account.

 

3.                                       ConditionsPrecedent for Trigger Date

 

Theoccurrence of the Trigger Date is subject to the following conditionsprecedent:

 

(a)                                  The PurchaseTermination Date shall not have occurred.

 

(b)                                 Buyer shallhave received a favorable opinion of counsel to Seller relating to the truesale nature of this Agreement, in form and substance satisfactory to Buyer.

 

(c)                                  Buyer shallhave received acknowledgment or time-stamped receipt copies of proper financingstatements (showing Seller as debtor/seller and Buyer as securedparty/purchaser, and stating that the financing statements are being filedbecause UCC Section 9-109 does not distinguish between a sale and a securedloan for filing purposes) duly filed on or before the Trigger Date under theUCC.

 

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Exhibit C

Representations and Warranties

 

(a)                                  Thereceivable information contained on the exhibit to each Request is a true andcorrect list of the purchase order numbers, the invoice numbers, and the unpaidamounts due in respect thereof which comprise the Purchased Receivables on suchPurchase Date.  Buyer has received trueand correct copies of all the documentation relating to each of the PurchasedReceivables.  None of the PurchasedReceivables are currently evidenced by chattel paper or instruments.  Each of the Purchased Receivables is in fullforce and effect and is the valid and binding obligation of the related AccountDebtor, enforceable in accordance with its terms, and constitutes such AccountDebtor’s legal, valid and binding obligation to pay to Seller the amount of thePurchased Receivables, subject, as to enforcement of such Account Debtor’spayment obligation, to bankruptcy, insolvency, reorganization, arrangement,moratorium and other laws of general applicability relating to or affectingcreditors’ rights.  Neither Seller northe related Account Debtor is in default in the performance of any of the provisionsof the documentation applicable to its transactions included within thePurchased Receivables.  Seller hasdelivered to the related Account Debtor all property or performed all servicesrequired to be so delivered or performed by the terms of the documentationgiving rise to the Purchased Receivables. The payments due with respect to each Purchased Receivable are notcontingent upon Seller’s fulfillment of any further obligation.

 

(b)                                 EachReceivable included in a Request as a Proposed Receivable, as of the date ofsale hereunder, is (i) an Eligible Receivable, and (ii) without theprior consent of Buyer, (x) the sale terms thereof does not exceed 90 days, and(iii) the Net Invoice Amount thereof is not less than $25,000.

 

(c)                                  Seller isthe legal and beneficial owner of each Eligible Receivable free and clear ofany lien, encumbrance or security interest; upon each purchase of a PurchasedReceivable, Buyer shall acquire valid ownership of each Purchased Receivableand the collections with respect thereto prior to all other Persons.

 

(d)                                 Seller is alimited liability company duly formed, validly existing and in good standingunder the laws of the State of Delaware, and is duly qualified to do business,and is in good standing, in every jurisdiction where the nature of its businessrequires it to be so qualified.

 

(e)                                  Theexecution, delivery and performance by Seller of the Agreement and the otherdocuments to be delivered by Seller hereunder, (i) are within Seller’slimited liability company powers, (ii) have been duly authorized by allnecessary limited liability company action, and (iii) do not contravene (1) Seller’scertificate of formation or limited liability company agreement, (2) anylaw, rule or regulation applicable to Seller, (3) any contractualrestriction binding on or affecting Seller or its property, or (4) anyorder, writ, judgment, award, injunction or decree binding on or affectingSeller or its property.  The Agreementhas been duly executed and delivered by Seller. Seller has furnished (or will furnish prior to the initial PurchaseDate) to Buyer

 

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a true, correct and complete copy of itscertificate of formation and limited liability company agreement, including allamendments thereto.

 

(f)                                    Noauthorization or approval or other action by, and no notice to or filing with,any governmental entity is required for the due execution, delivery andperformance by Seller of the Agreement or any other document to be deliveredthereunder except for the filings or notices as may be necessary to perfect thesecurity interest granted to Buyer pursuant to the Agreement.

 

(g)                                 TheAgreement constitutes the legal, valid and binding obligation of Seller,enforceable against Seller in accordance with its terms, except as limited bybankruptcy, insolvency, moratorium, fraudulent conveyance or other lawsrelating to the enforcement of creditors’ rights generally and generalprinciples of equity (regardless of whether enforcement is sought at equity orlaw).

 

(h)                                 As of theinitial Purchase Date, all conditions precedent set forth in Exhibit Bhave been fulfilled or waived in writing by Buyer, and as of each PurchaseDate, the respective conditions precedent set forth therein have been fulfilledor waived in writing by Buyer.

 

(i)                                     There is nopending or, to its knowledge, threatened action, proceeding, investigation orinjunction, writ or restraining order affecting Seller, Parent or any of theiraffiliates before any court, governmental entity or arbitrator which couldreasonably be expected to result in a Material Adverse Change, and Seller isnot currently the subject of, and has no present intention of commencing, aninsolvency proceeding or petition in bankruptcy.

 

(j)                                     Seller is incompliance in all material respects with the agreements and sale terms relatingto the Purchased Receivables, and the Purchased Receivables, and the agreementsand sale terms related thereto are not subject to any defense or Dispute or anyoffset, counterclaim or other defense, whether arising out of the transactionscontemplated by the Agreement or independently thereof.  No effective financing statement or otherinstrument similar in effect covering any Receivable is on file in any recordingoffice, except those filed in favor of Buyer relating to the Agreement, and nocompeting notice or notice inconsistent with the transactions contemplated inthe Agreement remains in effect with respect to any Account Debtor.

 

(k)                                  ThePurchased Receivables are denominated and payable only in United States dollarsin the United States.

 

(l)                                     Seller hasnot changed its principal place of business or chief executive office in thelast five years.

 

(m)                               There existsno event of Material Adverse Change.

 

(n)                                 Seller’sassets are free and clear of any liens in favor of any taxing authority, anyEmployee Benefit Plan or the PBGC other than inchoate tax liens.

 

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Exhibit D

Covenants

 

Untilthe later of the termination of the Agreement and the date that the OutstandingPurchase Amount equals zero:

 

(a)                                  CompanyExistence.  Seller will complyin all material respects with all material applicable laws, rules, regulationsand orders and preserve and maintain its company existence, rights, franchises,qualifications, and privileges.  Sellerwill keep its state of formation as the State of  Delaware and principal place of business andchief executive office and the office where it keeps its records concerning theReceivables at the address set forth in Section 6 of the Agreement or,upon 30 days’ prior written notice to Buyer, at any other locations injurisdictions where all actions reasonably requested by Seller or otherwisenecessary to protect, perfect and maintain Buyer’s security interest in theReceivables have been taken and completed.

 

(b)                                 Books andRecords.  Seller shall keepits books and accounts in accordance with GAAP and, at all times following theTrigger Date, shall make a notation on its books and records, including anycomputer files, to indicate which Receivables have been sold to Buyer.  Seller shall maintain and implementadministrative and operating procedures (including, without limitation, anability to recreate records evidencing Receivables and related contracts in theevent of the destruction of the originals thereof), and keep and maintain alldocuments, books, records and other information reasonably necessary oradvisable for collecting all Receivables (including, without limitation,records adequate to permit the daily identification of each Receivable and allcollections of and adjustments to each existing Purchased Receivable).

 

(c)                                  True Sale.  On and after the Trigger Date, Seller shalltreat each sale of Purchased Receivables hereunder as a sale for federal andstate income tax, reporting and accounting purposes.

 

(d)                                 Sales, Liensand Debt.  Seller will notsell, assign (by operation of law or otherwise) or otherwise dispose of, orcreate or suffer to exist any lien, encumbrance or security interest upon orwith respect to, the Receivables or upon or with respect to any account towhich any collections of any Receivable are sent, or assign any right toreceive income in respect thereof except the security interests in favor ofBuyer.

 

(e)                                  Extension orAmendment of Receivables. Seller shall not amend or extend the payment terms under any PurchasedReceivables, unless approved in advance by Buyer, and shall not otherwise waiveor permit or agree to any deviation from the terms or conditions of anyPurchased Receivable except in accordance with prior and prudent businesspractices.

 

(f)                                    Audits andVisits.  Seller will, at anytime and from time to time during regular business hours as requested by Buyer,permit Buyer, or its agents or

 

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representatives, upon reasonable notice, (i) ona confidential basis, to examine and make copies of and abstracts from allbooks, records and documents (including, without limitation, computer tapes anddisks) in its possession or under its control relating to Receivablesincluding, without limitation, the related contracts, and (ii) to visitits offices and properties for the purpose of examining and auditing suchmaterials described in clause (i) above, and to discuss matters relatingto Receivables or its performance hereunder or under the related contracts withany of its officers or employees having knowledge of such matters.

 

(g)                                 ReportingRequirements. Seller will provide to Buyer (in multiple copies, if requested by Buyer)the following:

 

i.                                          as soon asavailable and in any event within 45 days after the end of each of the firstthree quarters of each fiscal year of Seller and Parent, consolidated balancesheets of Parent and its subsidiaries as of the end of such quarter andconsolidated statements of income, cash flows and retained earnings of Parentand its subsidiaries for the period commencing at the beginning of the currentfiscal year and ending with the end of such quarter, certified by the chieffinancial officer of Parent;

 

ii.                                       as soon asavailable and in any event within 90 days after the end of each fiscal year ofSeller and Parent, a copy of the audited consolidated financial statements(together with explanatory notes thereon) and the auditor’s report letter forsuch year for Parent and its subsidiaries, containing financial statements forsuch year audited by independent public accountants of recognized standing;

 

iii.                                    promptlyafter the sending or filing thereof, if any, copies of all reports andregistration statements that Parent or Seller thereof files with the SEC or anynational securities exchange and official statements that Parent or Sellerthereof files with respect to the issuance of tax-exempt indebtedness;

 

iv.                                   at least tenBusiness Days prior to any change in the Borrower’s name, a notice settingforth the new name and the proposed effective date thereof;

 

v.                                      on the firstBusiness Day of each week (or on such other day of the week as may be mutuallyagreed upon by Buyer and Seller from time to time), invoices, ReconciliationReports and aging and past due reports relating to the Purchased Receivables,together with such other data, reports and information relating to theReceivables requested by Buyer from time to time;

 

vi.                                   immediately(and in no event later than one Business Day following actual knowledge orreceipt thereof), written notice in reasonable detail, of any lien, encumbranceor security interest asserted or claim made against a Receivable; and

 

vii.                                as soon aspossible and in any event within five days after becoming aware of theoccurrence thereof, written notice of any Material Adverse Change.

 

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(h)                                 FurtherInstruments. Seller shall, at its expense, promptly execute and deliver all furtherinstruments and documents, and take all further action that Buyer mayreasonably request, from time to time, in order to perfect, protect or morefully evidence the full and complete ownership and security interest in theReceivables, or to enable Buyer to exercise or enforce the rights of Buyerhereunder or under the Receivables.

 

(i)                                     Taxes.  Seller shall pay any and all taxes (includingany sales, occupational, excise, personal property, privilege or license taxes,or any withholdings, but not including taxes imposed upon Buyer with respect toits overall net income) relating to the transactions contemplated under theAgreement, including but not limited to the sale, transfer and assignment ofeach Purchased Receivable; except for those taxes that Seller is contesting ingood faith and for which adequate reserves have been taken.

 

(j)                                     PerformTerms.  Seller shall dulyperform and comply with all terms under each contract relating to the PurchasedReceivables and immediately inform Buyer of any breach or default by Seller orany Account Debtor of any of the terms thereof including, without limitation,the basis of any non-payment with respect to a Purchased Receivable.

 

(k)                                  NotAdversely Affect Buyer’s Rights. Seller shall refrain from any act or omission which might in any waywhich might be reasonably expected to prejudice or limit Buyer’s rights underany of the Purchased Receivables or this Agreement.

 

(l)                                     Disclosures.  Seller will promptly disclose to the publicsuch information as required pursuant to GAAP and in accordance with rules andregulations promulgated by the SEC under the Securities Exchange Act of 1934,as amended, including, without limitation, (i) the net effect of thisReceivables sale transaction on its financial condition, (ii) the nature,amount and term of the material financial obligations incurred hereunder, and (iii) adescription of events that may cause such an obligation to arise, increase orbecome accelerated.

 

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Exhibit E

Form of Notice to Account Debtor

 

[Letterhead of Seller]

 

[Date]

 

[Nameand Addressof Account Debtor]

 

*Re:*                              Change ofAccount and Address

 

ToWhom it May Concern:

 

Pleasebe advised that we are selling to Citibank, N.A. all of our existing and futurereceivables payable by you to us. Accordingly, you are hereby directed to make all wire transfers and sendall checks and other forms of payment directly to the following account:

 

 

 

 

Account #ABA #Confirm Phone Number: Attention:  

 

Theforegoing directions shall apply to all existing receivables payable to us and(until further written notice) to all receivables arising in the future and maynot be revoked except by a writing executed by Citibank, N.A.

 

Pleaseacknowledge your receipt of this notice by signing the enclosed copy of thisletter and returning it in the enclosed envelope.

 

Thankyou for your cooperation in this matter.

 
|   | UTSTARCOM  PERSONAL COMMUNICATIONS LLC |
|--------|----------------------------------------|
|   |                                   |   |
|   | By:                                    |   |   |
|   |                                   | [Authorized Officer] |   |

 

Receipt Acknowledged:[Name of Account Debtor]

 

 
| By:    |   |   |
|--------|--------|--------|
| Title: |

 

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Exhibit F

Events of Termination

 

Eachof the following shall be an “**Event ofTermination**”:

 

(a)                                  Anyrepresentation or warranty (other than those representations andwarranties  with respect to eligibilitycriteria of the Receivables, to the extent subject to the repurchase andindemnification provisions of Section 5 of the Agreement) made or deemedmade by Seller under or in connection with the Agreement or any information orreport delivered by Seller pursuant to the Agreement (other than  with respect to eligibility criteria of theReceivables, to the extent subject to the repurchase and indemnificationprovisions of Section 5 of the Agreement) shall prove to have beenincorrect or untrue in any material respect when made or deemed made ordelivered, and shall remain incorrect or untrue for 10 days after writtennotice thereof shall have been given to Seller or Parent by Buyer.

 

(b)                                 Seller orParent fails to perform or observe any term, covenant or agreement contained inthe Agreement or the Performance Undertaking on its part to be performed orobserved and any such failure shall remain unremedied for ten days (and withrespect to payment obligations, two Business Days) after written notice thereofshall have been given to Seller or Parent by Buyer.

 

(c)                                  Seller orParent shall fail to pay any principal of or premium or interest on any of itsindebtedness for borrowed money in a principal amount in excess of $10,000,000when the same becomes due and payable (whether by scheduled maturity, requiredprepayment, acceleration, demand or otherwise), and such failure shall continueafter the applicable grace period, if any, specified in the agreement orinstrument relating to such indebtedness; or any other event shall occur orcondition shall exist under any agreement or instrument relating to any suchindebtedness and shall continue after the applicable grace period, if any,specified in such agreement or instrument, if the effect of such event orcondition is to accelerate, or to permit the acceleration of, the maturity ofsuch indebtedness; or any such indebtedness shall be declared to be due andpayable, or required to be prepaid (other than by a regularly scheduledrequired prepayment or a voluntary prepayment), in each case prior to thestated maturity thereof.

 

(d)                                 Any purchaseof Receivables pursuant to the Agreement shall for any reason fail or cease tocreate or fail or cease to be a valid and perfected security interest (or,following the Trigger Date, ownership interest) in such Purchased Receivablesand the Collections with respect thereto free and clear of all Liens (otherthan permitted Liens) unless such Purchased Receivables (or portion thereof)are repurchased in the manner set forth in Section 5(a), or theindemnification payment is made to Buyer in the manner set forth in Section 5(b) withinfive Business Days following demand therefor, or any material provision of thisAgreement or the Performance Undertaking shall for any reason cease to be validand binding on Seller or Parent, or Seller or Parent shall so state in writing

 

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(e)                                  Seller orParent shall generally not pay its debts as such debts become due, or shalladmit in writing its inability to pay its debts generally, or shall make ageneral assignment for the benefit of creditors; or any proceeding shall beinstituted by or against Seller or Parent seeking to adjudicate it a bankruptor insolvent, or seeking liquidation, winding up, reorganization, arrangement,adjustment, protection, relief, or composition of it or its debts under any lawrelating to bankruptcy, insolvency or reorganization or relief of debtors, orseeking the entry of an order for relief or the appointment of a receiver, trustee,custodian or other similar official for it or for any substantial part of itsproperty and, in the case of any such proceeding instituted against it (but notinstituted by it), either such proceeding shall remain undismissed or unstayedfor a period of 60 days, or any of the actions sought in such proceeding(including, without limitation, the entry of an order for relief against, orthe appointment of a receiver, trustee, custodian or other similar officialfor, it or for any substantial part of its Property) shall occur; or Seller orParent shall take any action to authorize any of the actions set forth above inthis paragraph (e).

 

(f)                                    Seller orParent shall have consummated, or shall have entered into any transaction oragreement which shall result or be intended to result in any Change of Control;or a Change of Control occurs.

 

Ifan Event of Termination shall occur and be continuing, Buyer may, by notice toSeller, declare the Purchase Termination Date to have occurred, except withrespect to an Event of Termination arising as a result of clause (e) ofthis Exhibit F, in which case the Purchase Termination Date shall bedeemed to have occurred automatically and without notice.  Upon any such declaration, Buyer shall have,in addition to the rights and remedies which it may have under this Agreement,all other rights and remedies provided after default under the UCC and underother applicable law, which rights and remedies shall be cumulative.

 

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